Food prices rose last month at their fastest pace since 2009, led by the strongest rise in cereal values in more than four years, the United Nations said – as futures signalled further increases on their way.
The price of food rose 6.2%, adjusted for background inflation, in July, the strongest pace of increase since November 2009, as values were recovering from world recession, the UN food agency, the Food and Agriculture Organization, said.
The "sharp rebound", which came despite "little change" in prices of dairy or meat products, was "mostly driven by a surge in grain and sugar prices", the FAO said.
Sugar values rose by 11.7% on the month in real terms, their fastest pace in a year, a rally "triggered by untimely rains in Brazil, the world's largest sugar exporter, which hampered sugarcane harvesting.
"Concerns over India's delayed monsoon and poor rains in Australia also contributed."
Corn leads
Cereals prices soared 17.1%, their strongest increase since February 2008, in the run up to the last spike in values.
While rice prices remained "mostly unchanged", wheat values rose 19%, "amid worsened production prospects in the Russian Federation and expectations of firm demand for wheat as feed because of tight corn supplies".
Estimates for Russia's dryness-hit wheat harvest have been placed potentially as low as 40.5m tonnes by SovEcon, a figure which would put it below the drought-dented crop in 2010 which prompted the country to introduce an export ban.
Meanwhile, corn prices soared nearly 23% last month, lifted by "the severe deterioration of crop prospects in the United States following extensive drought damage".
While the drought also lifted soybean prices to record highs during the month, vegetable oil prices overall showed a relatively small increase, of 2.4%.
"The current and prospective ample availabilities of palm, sunflower and rapeseed oil prevented the index from rising more pronouncedly," the FAO said.
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Source: Argentine Beef Packers S.A.
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